China’s suicidal surplus


suicidi in cina

On April 4, the 4-4 (an ominous number in Chinese superstition, as four sounds like “death”), four young people killed themselves in Hunan. They didn’t know each other and met only through one of the hundreds of “suicide chat groups” active in China, each with up to 500 members. The oldest was 33; the youngest, a girl, was just 22.

Other countries have the same problem, but social issues can be funneled and dealt with through an open society. China doesn’t have an open society.

In 2005, with a very senior Asian politician, we tried to warn Beijing about the dangers of possible extensive unrest in Hong Kong in a decade. We saw then three issues: salaries stagnated, no opportunities to strike rich, and a new inflow of talented Mainlanders was taking up plum jobs. Young Hong Kongers might be marginalized and feel desperate. Political consciousness about the situation would ripen in a decade or so for various reasons. Democracy was a way to channel future resentment. Beijing didn’t see the dangers, but sure enough, in 2014 and then 2018, there were protests, and to crush them, Beijing killed the old Hong Kong.

Chinese suicide groups come after a significant movement of tangping, laying flat, doing nothing, de facto peaceful resistance, which has been expanding since 2017, when the term tangping first emerged. Laying flat and suicide drives could then become a political consciousness and active resistance in the next few years.

No exhaustive explanation of the tangping movement is available, but it is possibly a Hong Kong–like picture. Young people no longer have many opportunities for advancement, society is more demanding, and there is less hope around. It is a common feature in advanced countries, managed through open society and democratic institutions − something unavailable in China.

It happens on the following historical background − a four-century-old controversial problem of surplus.

(1) China’s trade surplus has been a problem for the US for over 20 years, and China hasn’t budged about it. It is crucial, and all arguments that it doesn’t matter are pretty weak. If it didn’t really matter, the Chinese would have solved it. In fact, China now has only one big growth driver: infrastructure, financed by printing money secured by growth from people’s huge savings (heavily “taxed” because the spread on interests of deposits versus loans is enormous) and fresh cash from the surplus. Without the surplus, everything would be more difficult, with factories closing down, a crisis of confidence in the market, et cetera. Theoretically, China can do without this huge surplus, but it needs to re-engineer the whole economy.

(2) Historically this is the third Chinese surplus crisis in 400 years. They curiously happen every 200 years. The first was around 1630, during the Ming dynasty. The crippled Ming economy got a boost around the late 16th century from Spanish trade via Manila and Mexico. The Spaniards and Portuguese bought Chinese vases and silk brocade for silver, which fueled the Ming economy. Around 1630, when the Habsburgs entered the 30 Years War, they didn’t have money for fancy Ming products. Silver inflow in China dropped, inflation set in, the Li Zicheng rebellion took over the country, the last Ming emperor hung himself, and the Qing moved in. Precisely 200 years later, around 1830, a surplus again caused a problem. This time the Qing were hoarding all the silver in the world by selling tea leaves and buying little in return. The English forced the sale of opium to balance the books. Then came the Taiping Rebellion and the fall of the Qing. Now we have a third surplus crisis, precisely 200 years after the second and 400 years after the first.

Are surpluses sometimes not a problem? Yes, but only if the two systems are financially, diplomatically, and militarily integrated, like the US with Japan and Germany. Even then, there are issues. And for China?

On top of this, there is a trove of other issues: military, geopolitical, technological, political systems, cultural, et cetera. It combines in a magic cauldron from which all the worst demons can emerge.

All of this could result in something that would make everything blow up. Now as in the past considerations about domestic system stability trump concerns about solving issues that do not seem so urgent and can be postponed for some time.

But something could change very fast.

An external scenario in the current tense international environment could be a brief military clash causing a few dozen or hundreds of dead. If China wins, it’s a wild tiger; if China loses, it’s a paper tiger. In any case, it will be shut out from the rest of the international business community. Then there would be an economic crisis. Next, it “goes North Korea” and festers for years, or there is a coup.

Meanwhile, Russia will be split, flip to a pro-Western stand, or resist. If it splits or flips, China will be surrounded. If Russia resists, China would be saddled with feeding 140 million riotous and troublesome people likely to resent being harnessed to the Chinese cart as the Mongols yoked their ancestors until the 16th century.

The external scenario can be compounded in a vicious circle by the burgeoning tangping-related spin domestically.

The only real solution for Beijing now is, as it was with the Ming or the Qing, to escape this historical trap. It requires a leap of imagination and vision that apparently China didn’t have in the past.

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